Arsenal need to learn lessons from 2008

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In 2007/08, we should have won the league.

We led for much of the season, only to capitulate in the closing stages of the season – winning just 5 of the last 12.

The season derailed following that game against Birmingham City. Eduardo’s injury and then a heads gone moment in the 95th minute that saw Birmingham equalise from the penalty spot.

Club captain William Gallas threw a strop on the pitch and the team never recovered.

We ended up 3rd, 4 points behind league winners Manchester United.

The lessons to be learned are not what happened during that season, but what happened after.

Arsene Wenger had built a team of the most exciting young talent in Europe.

2007/08 should have been the beginning of something special, not the best it would get for nearly a decade.

That young team contained the likes of Cesc Fabregas (21 years old), Robin van Persie (24), Theo Walcott (18), Gael Clichy (22), Alex Song (20), Abou Diaby (22), Denilson (20), Mathieu Flamini (24), Emmanuel Adebayor (24) and Nicklas Bendtner (20).

We were set up nicely to dominate English football – and potentially European – for some time.

Having nearly one the title, we needed a few tweaks. A bit of investment in some senior pro’s to guide the young squad.

Summer 2008 we bought French starlet Samir Nasri, Welsh teenage sensation Aaron Ramsey and Manchester United veteran Mikel Silvestre.

It built on the young squad with more undoubtedly young talent, but it was not enough and we ended up 4th, 18 points behind Manchester United.

Reportedly hamstrung by stadium debt as the UK entered recession, we were either unable or unwilling to spend. And the next summer everything began to unravel.

In 2009 we spent just £10m on you g Ajax defender Thomas Vermaelen. And then the exodus begun.

Emmanuel Adebayor and Kolo Toure were pochard by nouveau riche Manchester City. Both signed big contracts with their new club and it showed to the Arsenal players what they could earn elsewhere.

As the lack of investment continued, more and more players became frustrated about our transfer policy. We were simply unable to match our talented young players ambitions.

This was not just about what they could earn, but also what they could win.

We were falling well behind Manchester City, Man U and Chelsea, and we could no longer be considered one of Europe’s elite.

Every summer we failed to invest, more players departed – peaking in 2011 when Clichy, Fabregas and Nasri all departed.

Almost every one of those young players we that nearly took us to the Premier League title in 2008 won the league at their new clubs.

Cesc and Song at Barcelona, Toure, Clichy and Nasri at City. van Persie at Manchester United.

Had we matched their ambition when at Arsenal, they might have taken us to the title.

And that is where the lessons need to be learned.

Regardless of where we finish this season, we need to build on this young team. We can not rest on our laurels.

Manchester City will spend again. Newcastle are now financed by a country. Manchester United will come again.

If we do not build on this season, it will be deja vu.

How long will the likes of Bukayo Saka, Gabriel Martinelli and William Saliba hang about if we do not match their ambition?

The likes of Manchester City, Liverpool, Real Madrid and Barcelona are already reportedly sniffing around our young talent.

We need to match their ambition on the pitch and in their back pocket.

Over the next two windows, I would expect us to spend £120m+.

A new defensive midfielder and more attacking talent – both centrally and wide – is what we need.

We also need to tie the younger lads down to long term deals, securing their future with us.

I am more confident now that we will do that.

The stadium debt is now more manageable, and in Edu and Arteta, we have an equally ambitious management team that won’t try and treat us like some sort of socialist footballing experiment.

Hopefully KSE have learned that to move forward, you need investment. You can not just rely on young players improving.

2008 will live long in my memory as a missing opportunity. What happened in the half-decade after that was simply disgraceful.

UTA.

Keenos

Arsenal for sale: Will KSE follow in the Glazier’s and FSG footsteps?

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First Liverpool, now Manchester United.

Two big, American owned, English clubs are up for sale. Why is this? And will the Kroenke’s follow a similar route with Arsenal.

Value at their peak?

The feeling is, football may well be “at its peak”.

Many of the American owners of top clubs have made their money through the financial markets. They (and the people around them) are experts at reading the markets. Finding companies that are undervalued, and selling them when they think they have reached peak value.

Have these financial experts looked at football clubs and thought “they have reached their peak, time to sell”. But why have they reached their peak?

European Super League

You can only wring a cloth so many times.

Two thirds of a top clubs revenue comes from TV money and gate receipts.

Since the Premier League came into existence, TV money has jumped dramatically every deal.

Sky numbers have stagnated for many years, and due to the cost of living crisis in the UK, their subscribers are declining – a 255,000 decrease in the second quarter of 2022.

In the last decade, the increasing in TV money has mainly been driven by overseas deals.

With “the world now conquered” and Sky’s decline viewership, clubs had to look elsewhere for to increase revenue. That was the European Super League.

Fans swiftly shut the door on that idea, leaving clubs very few alternative routes to increase revenue.

Stagnating gate receipts

You feel gate receipts in England have potentially reached their peak.

Since the Emirates has opened, Arsenal have only had 3 (from memory) “real” price rises (excluding rises due to VAT or reversals from European football discounts).

The aforementioned cost of living crisis means many people do not have the money for luxury entertainment – football, concert and other sporting tickets, holidays, etc.

Arsenal are currently suffering from a huge supply & demand issue, but dramatically increase ticket prices will be a huge PR own goal just as fans are on side.

And even an increase in tickets will not do much – if Arsenal increased tickets by 10% it would only add another 3% in revenue. Not enough to increase club value.

The only way clubs are dramatically increasing gate receipts these days is to expand their current stadium or build a bigger one. But that in itself comes at a huge cost and adding up to £1BU in debt to your club will only reduce its value in the short term (Spurs owners are struggling to sell due to the levels of debt).

So with no huge increases in gate receipts or TV revenue, and the Super League off the table, you can understand why investors might think footballing revenue has peaked.

Chelsea

The recent sale of Chelsea would have made owners of other clubs sit up and take note.

The club sold for £4.25bn, with revenue of £428m.

Manchester United’s revenue is £583m, Liverpool £487m. So how much would they be worth?

It would be too easy to say “£5.8pm & £4.8bn” based on the x10 multiplier Chelsea were sold for. There are other factors to take into account.

Chelsea were sold as debt free, whilst Man U have over £500m in debt.

The buyer of Chelsea would know they are in desperate need of a new stadium (Stamford Bridge capacity: 40,000), whilst Liverpool are in the process of expanding to 61,000.

Manchester United have the biggest ground in the country, but it is outdated and in desperate need of investment. Some experts believe they might be best off pulling it down and starting again.

FSG paid £300m for Liverpool back in 2010. The Glaziers spent close to £800m on Manchester United.

Both would be looking at at least a £4bn profit on their investment if they sold. Huge.

Incoming global recession

As the world continues to financially recover from Covid, and with the war in Ukraine, we are facing a global recession (it is not just the UK suffering right now).

Prior to a global recession is a good time to sell as the value of the assets will likely drop. Likewise, the cash a sale generates will be king.

State investment

The final impacting factor is the rise in state investment.

With the likes of Newcastle, Manchester City and PSG now owned by oil states, it is becoming increasingly harder for “self sustained” clubs to compete.

Success and fan bases go hand in hand.

We already see more Manchester City fans across the UK than ever before (you never used to see a City shirt in London). And the same is happening abroad.

Foreign fans are often quick to jump onto the next “successful club”. With the swing of success from Man U to Man City, the red shirts are being replaced by Sky Blue.

It will take time, but if City’s dominance (alongside potentially Newcastle’s), we will begin to see the fan base of “traditional” clubs decline as new, younger fans begin supporting the latest successful clubs.

As the fanbase declines, so will potential revenue from sponsors.

The likes of Manchester United and Liverpool might currently be at their peak in terms of marketability. And they simple can not keep up with state owned clubs.

So what does this mean for Arsenal?

Reports are that Manchester United are looking to sell having spoken to FSG and found out the offers on the table for Liverpool. You would be surprised if the Kroenke’s have not had the same conversations.

But will that be enough for the Kroenke’s to sell? Possibly not.

Whilst Liverpool and Manchester United are at their peak, value wise, Arsenal still have room to grow.

We are on an upwards curve on the pitch (Liverpool and Man U are on a downward curve).

Our most recent revenue was £327m.

That is £100m less than Chelsea, £160m less than Liverpool and £260m less than Manchester United.

You want to sell an asset at its peak, not whilst it is on the up. And we are on the up.

If we continue on our current trajectory, and keep hold of our talented young players, success will follow. And with success will come an increase in revenue.

Champions League football, more from kit manufacturers, more from kit sponsors, new global partners.

If we go on the x10 multiplier of Chelsea, then we will sell for around £1bn less than them, and potentially £2bn less than Man U.

The Kroenke’s would be walking away just as we are on the right path back to the top, and would potentially be sacrificing bigger profits down the line.

The Kroenke’s will look at what others are getting, and Arsenal’s current revenue. They will know that if we get back to where we should be, our value will dramatically rise. They won’t want to “sell early” and miss out on further profits.

Manchester United and Liverpool might be sold over the next few months. I do not see the Kroenke’s walking away for at least another 5 years.

Keenos

Time to pay Bukayo Saka what he is worth

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For a while now, a discussion that has dominated the WhatsApp groups is the contract situation of Bukayo, Gabriel Martinelli and William Saliba.

Everyone is in unanimous agree that all 3 need to be tied down to long term deals. But the question of “how much would you pay them” also continually comes up as a follow up question.

I have long been of the opinion that Arsenal have a wage structure, and we need to keep with it.

In the last 24 months the club have done well to get rid of those underperforming, over paid stars, and in turn reorganising a wage bill that did not really have much structure to it.

Now Saliba, Saka and Martinelli need to get their new deals within the current wage structure. And I held the view that we should not be held to ransom by them.

Arsenal’s top earners are reportedly:

Gabriel Jesus£265,000
Thomas Partey£200,000
Oleksandr Zinchenko£150,000
Ben White£120,000
Kieran Tierney£110,000
Granit Xhaka£100,000
Gabriel Martinelli£90,000
Martin Ødegaard£79,038
Always take these lists with a pinch of salt. No one knows exactly 100% what players earn, and it doesnt take into accounr bonuses, signing on fees, etc

We need to pay our players what they deserve based on their long term performances.

Take William Saliba.

He has played less than 20-games for Arsenal. Whilst I expect him to get a huge payrise (currently on £40k a week), he has not yet put in the consistent performances to by on par with Thomas Partey.

He should “treble his money” and be in and around what Ben White is on – I would imagien Gabriel Magalhaes’ deal is in and around this figure too.

Saliba would then be on what you expect for a starting Arsenal defender.

If he starts demanding the £200k+ that Thomas Partey and Gabriel Jesus are in, he can go swivel.

We always need to keep players hungry, knowing that if they continue to improve they will get an increase.

Likewise, we need to be aware that paying one individual huge wages can impact others.

Give Saliba £200k a week and it will not long be long until Gabriel, White and Zinchenko are demanding similar. All 4 are at a similar level for us.

Gabriel Martinelli is in a similar situation.

He is progressing nicely, but this is his first (half a) season playing at this level.

He clearly should not be on the same level as players who have performed at a high level for a lot of their career (Partey, Jesus). But should now be on the sort of money on those below. So we are looking at around £120k a week again.

Previously, I had Bukayo Saka in and around this level as well.

But his performances, both for Arsenal and England, clearly lead him to deserve more than this.

Saka is now in his 3rd season as a senior first team regular and is clearly in our top 3 best players. He is one of England’s best players and could be the star of this World Cup.

This tournament could be his “breakout” tournament on the international stage.

He is perhaps not yet at the level of Partey and Jesus – who have been putting in his level performances for 3 or 4 years. But he is the level above the Saliba and Martinelli’s of this world.

A wage structure is all about creating a clear path so players know the types of performances they need to put in to “jump to the next level”.

Any decent run company will have similar, and it should stop staff feeling that they are underpaid and undervalued. And if staff do think that they deserve more, even though their performances do not warrant the rise, then they are welcome to leave!

Jesus and Partey are “established international stars” who have been performing at this level for 4-5 years. £200-£280k is fair.

Neither are world class, which is why they are not on the £300k+.

Beneath that, you have the “international stars” who have perhaps only just entered that category. That is where Saka sites. £150-£180k is reasonable.

And if he continues over the next 2 seasons to reach this level, he will then be on the £200k+ on his next contract (and if he kicks on again, in another 2 years he will get the £300k+ deals, and still be just 25!)

Then you have “regular domestic starters”.

Those who are have performed at a high level, but perhaps not yet reached the next level.

Think Granit Xhaka, Martin Odegaard, Gabriel, Zinchenko. And soon to probably be Saliba and Martinelli.

£120-150k is what is reasonable for them.

None of them have put in the performances as consistently as Saka, so it is right they sit below him. Another 18 months and they have kept the same level, they should be sat down with again.

And yes, based on the above, I would expect Xhaka and Odegaard to get new deals this summer.

Xhaka’s contract runs out in 2024. A new 3 year deal taking him through to 2026 on £120-150k a week is the right move to make.

Odegaard meanwhile has a contract through to 2025. Tie him down in the summer to a new 5-year deal. Upper end of the structure on £150k. you would maybe even consider the £180k if he keeps up this seasons performances.

Below them, you then have the likes of Aaron Ramsdale, Kieran Tierney and Takehiro Tomiyasu. Those that are in and around the first team, but can climb a few more levels in performance (or become a more regular starter). They should be on £80-120k a week.

A case could be made for Ramsdale to get a payrise. And Tomiyasu would probably have got one had White not taken his place.

This is also the area we need to add too over the next few windows.

Getting in a new defensive midfielder, winger and striker who are Tomiyasu level. Internationals ready to compete with the current first team, but would probably be considered “2nd string”.

World Class – £300k+
Established International Class – £200-275k
International Class – £150-£180k
Regular First Teamers – £120k-£150k
Top Level Squad Players / Breakthrough First Teamers – £80-£120k
Squad Players – £50-£80k
First Year Squad Players – £40-60k

So lets take Charlie Patino.

Next year he will join the first team squad. His new deal should be in and around the £40-60k region. New 4-year deal.

Give it 2 years, and depending on how he has progressed will depend on where he sits on the wage structure.

If he is clearly just a squad player (think Rob Holding, Mo Elneny), then its a new 5-year deal, £50-80k. If he is only just breaking into the first team, it is £80-£120k. If he has established himself in the first team for 18 months, £120k.

New contracts every 2-years, with pay rises depending on where they are within the squad.

That way we necver overpay a player, we never underpay or risk losing them for free, every player understands what he needs to do, and every greedy player is shown the door.

Saka, with his performances over the last 2 and a half years, now deserves that international class money. And if he keeps this level up, a new contract will follow in another two years!

Keenos